Jewellery by Country

China – Jewellery Briefing

In 2001, China was ranked as the third largest consumer of gold in jewellery globally according to GFMS, absorbing just over 180 tonnes (5.79 million oz). In the last few years, weaker economic performance, growing unemployment and competition from new consumer goods has impacted negatively on the strong fabrication and consumption growth of the 1990s.The main manufacturing regions are in and around Beijing, Shanghai and in the southern provinces of Guangdong and Fujian.

• The gold jewellery market is still tightly regulated so that the supply and pricing of gold is under the control of the People’s Bank of China, although in 2002 and 2003 the Bank’s pivotal role in the market is likely to be reduced as the Gold Exchange in Shanghai gets off the ground. Historically, the official price of gold was typically at a premium over the international price, although at times the opposite has held true. In June 2001, the Bank began to set prices on a weekly basis, using the international market rates as a benchmark. As a consequence, the deviations in local prices compared to international levels have declined, although significant arbitrage opportunities do emerge from time to time.
• Much of Hong Kong’s manufacturing has shifted to the mainland China to benefit from the cheap labor and the enormous sales potential in the Chinese market.

• China’s jewellery exports to the rest of the world are growing and are handled mainly through Hong Kong, accounting for over 10% of total production.
• Gold jewellery consumption in Chinese domestic market, which in size ranks third in the world league after India and the US, was about 184 tonnes in 2001 (5.91 moz.) according to GFMS. Volumes have come down since the early nineties due to a combination of factors including freer markets for competing platinum and silver jewellery, increasing presence of diamond gold jewellery and the new availability of competing goods and services.

• The Chinese market is still characterized by 24 carat chuk kam jewellery, a traditional store of value, although 18 carat is also available. In the cities, lower caratage jewellery, especially 18 carat gemset, is becoming increasingly popular. Strictly speaking, gold jewellery is subject to a 17% value-added tax and a 5% sales tax, while imported jewellery carries duties starting at 40% (although this is likely to fall as part of China’s entry to the WTO) . However, in reality a substantial proportion of jewellery is sold unofficially and with no tax.
• Wholesaling is still relatively undeveloped. Manufacturers usually sell direct to retail comprising state-owned department stores/shopping malls and specialized jewellery shops.

Egypt – Jewellery

Egypt is one of the three major jewellery producers in the Middle East using more than 100 tonnes (3.22 million oz) a year. In 2001, 96 tonnes (3.10 million oz) were used to make gold jewellery products, predominantly for the Egyptian home market.

• Most of the jewellery manufacture is carried out in and around Cairo. There is also some manufacturing in Alexandria. Approximately 3,000 production units are engaged in making the jewellery but only a handful are industrial-style factories. The jewellery is produced in the main by small, two to three person workshops.
• The staple items are 21 carat bangles and earrings, purchased by the local population as a store of value. This is particularly true for the people of Upper Egypt and the millions of villagers who have migrated to Cairo. However, in line with modernization and the deregulation of the economy, there has been a growing trend toward 18 carat, more European style jewellery, which is preferred by the urban populations. Across the country, the breakdown is approximately 70% in 21 carat and 30% in 18 carat.

• Egypt has an official hallmarking system based on the British model and set up in the 1920′s. The Assay Office in Cairo handles most of the jewellery volume. Titles admitted are 23.5 carat, 21 carat, 18 carat and 14 carat, but most jewellery is in 18 or 21 carat. The making charge is 20 piastres per gram for local products and 60 piastres per gram for imported items. There is a sales tax on gold jewellery of 2.0 and 1.23 Egyptian pounds on 18 and 21 carat items respectively. The sales tax was widened in 2001 to include both wholesale (Stage Two) and retail operations (Stage Three). (Beforehand the sales tax had applied to only the manufacturing sector, referred to a Stage One.) The charges, noted above, are inclusive of Stages One through to Three. However, to calculate the total charges, which jewellers face, income tax and stamping fees must be added to the above fees, which are 400 piastres for both 18 and 21 carat pieces.

• The Egyptian gold jewellery market ranks amongst the top ten worldwide. Consumption in 2001 stood at 116 tonnes (3.73 million oz), compared with 128 tonnes (4.12 million oz) the year before. Over the past decade, the share of imported jewellery of total consumption has declined and last year stood at close to just 6%.

Although Egypt has a substantial tourist industry, gold jewellery sales to tourists do not constitute a major feature of the market.

France – Jewellery Briefing

France is one of Europe’s mid-ranking producers of gold jewellery, processing just under 27 tonnes (0.86 million oz) of fine gold in 2001 to create around 9 million items.

• Jewellery is produced in the area of St Amand-Montrond and in the Rhône-Alpes, Franche-Comté, Alsace and Paris regions.
• There are just under 4,000 production units but the vast majority are workshops. Less than 10% of the units employ more than ten people and a bare 5% process more than 30 kg fine gold per month.
• About one quarter of gold jewellery production is exported, main markets being US and the Far East.
• The French home market is the fourth largest in Europe accounting for 52 tonnes (1.67 m oz) fine gold.
• All items weighing more than 3 grams sold on the French market must be assayed by the Bureau de la Garantie and carry the official hallmark. Eighteen carat is the traditional home market title and accounts for 99% of items sold. Nine carat and 14 carat have been admitted since 1994 but have made extremely little impact.
• Jewellery is sold through 9,000 outlets and the value of retail sales is in the region of €2.5 bn.
• Domestic market growth over the last decade is largely attributable to the growing distribution of gold jewellery through hypermarkets at lower mark-ups than those practised in traditional retail outlets. However, independent retailers are still prized for their exclusive models and unique service.

Imported jewellery, mainly from Italy and then Asia now accounts for more than half of all domestic sales.

Germany – Jewellery Briefing

Germany ranks sixth in Europe, after Italy, UK and Ireland, Switzerland, Spain and France, in volume of gold used in jewellery fabrication. According to GFMS, just over 26 tonnes (0.85 million oz) went into production in 2001.

• Pforzheim is the major manufacturing area with some production also carried out in Idar Oberstein and Schwäbisch Gmünd. Overall, more than 4,000 production units are engaged in making gold jewellery but fewer than 15% are classified as industrial concerns. Fewer than 150 units employ more than twenty workers and production has come down strongly since peaking in 1991 due in part to high costs and import substitution.

Germany ranks sixth in Europe, after Italy, UK and Ireland, Switzerland, Spain and France, in volume of gold used in jewellery fabrication. According to GFMS, just over 26 tonnes (0.85 million oz) went into production in 2001.

• Pforzheim is the major manufacturing area with some production also carried out in Idar Oberstein and Schwäbisch Gmünd. Overall, more than 4,000 production units are engaged in making gold jewellery but fewer than 15% are classified as industrial concerns. Fewer than 150 units employ more than twenty workers and production has come down strongly since peaking in 1991 due in part to high costs and import substitution.

In volume, roughly one third of the jewellery on the German market is in 8 carat. Over the past decade the share of 8 carat in the home market has fallen at the expense of 14 and 18 carat jewellery. Imports of gold jewellery have fallen since their peak in 1994 but they have taken a growing share of the domestic market, now accounting for well over half, as overall consumption has fallen faster still.

Hong Kong – Jewellery Briefing

GFMS estimate that jewellery production in Hong Kong used around 43 tonnes (1.38 million oz) fine gold in 2001.

• Although there is still an active fabrication base in Hong Kong, this has been shrinking over the past decade, and GFMS notes that it is possible that a substantial proportion of the fabrication attributed to Hong Kong is actually been undertaken on the mainland. Much of the production that has remained in Hong Kong itself is of high end jewellery, in particular diamond set pieces, and most of the factories using labor-intensive processes have moved to mainland China to take advantage of cheaper labor.
• Regular exports from Hong Kong, which have grown strongly over the past decade, include re-exports of gold jewellery made in China. Approximately one quarter of Hong Kong’s own production is earmarked for these exports. The US is by far the main destination taking almost one half of the total. Other leading markets for Hong Kong jewellery are Japan, Switzerland, Germany and the UK. During the Asian crisis, many manufacturers turned to new markets particularly in the US and Europe.
• Gold and platinum on sale in Hong Kong must carry a mark of fineness as prescribed by the Government Customs & Excise Department. All titles are admitted from 8 carat to 24 carat. However, in practice, around 70% of demand on the local market is for 24 carat chuk kam, pure gold investment jewellery which is now also produced in modern designs

• ·  Harsh domestic economic conditions in recent years have seen Hong Kong’s consumption of jewellery decline sharply. In 2001 GFMS estimate that only 27 tonnes (0.87 million oz) of jewellery was consumed, compared with over 60 tonnes (1.93 million oz) in 1997.
• ·  Established Hong Kong retailers are facing keen competition from manufacturers that have integrated vertically and opened chain stores in recent years selling trendy and low-priced items for mass customers.

India – Jewellery Briefing

India is the world’s foremost gold jewellery fabricator and consumer with fabrication and consumption annually of over 600 tonnes (19.2 million oz) according to GFMS. Measures of consumption and fabrication are made more difficult because Indian jewellery often involves the re-making by goldsmiths of old family ornaments into lighter or fashionable designs and the amount of gold thus recycled is impossible to gauge. Estimates for this recycled jewellery vary between 80 tonnes (2.6 m oz) and 300 tonnes (9.6 m oz) a year. GFMS estimates are that official gold bullion imports in 2001 were 654 tonnes (21.03 m oz).

• Plain 22 carat jewellery is the core of consumption especially in the rural areas, where gold is so important in judging a family’s status at a marriage. A basic marriage set for a bride is two earrings, one nosepin, one ring, one necklace and two bangles, all in 22 carat gold and weighing up to 200 grams (6.2 oz).
• Studded (i.e. gem-set) 18 carat jewellery is increasingly popular in the cities and is estimated to have used 31 tonnes (1 million oz) in 2001.

• ·  Medallions, charms and small gift items account for up to half of what is loosely called jewellery. These items are popular as gifts at weddings and other family events.
• ·  Gold thread, known as Jari used in high quality saris worn at weddings and special occasions requires somewhere in the region of 20 tonnes (0.6 m oz) annually.
• ·  The market is highly fragmented with an estimated 100,000 workshops supplying over 300,000 retailers, mostly family-owned, single shop operations. The industry is beginning to be modernized with large factories, installing the latest equipment, in centres such as Mumbai, Ahmedabad and Bangalore.
• ·  Hallmarking does not exist in India and under-caratage is commonplace. The Bureau of Indian Standards has introduced a voluntary scheme, which, although not yet widely used, is becoming more popular. The minimum legal caratage is 9 carat.
  • ·  The number of retail jewellery outlets has increased greatly since the abolition of gold control, as has the number of Indians possessing gold jewellery.
  • ·  Exports have increased dramatically since 1996, and in 2001 stood at over 60 tonnes (1.92 m oz). The US accounted for about one third of total official exports. Manufacturers located in Special Export Zones can import gold tax-free through various registered banks under an Export Replenishment scheme.
  • ·  Exports are facilitated by the Gem & Jewellery Export Promotion Council.

Italy – Jewellery Briefing

Italy is the foremost manufacturer and exporter of mass-produced and crafted gold jewellery. The country is also the largest single consumer market in Europe and the acknowledged international trend-setter when it comes to jewellery design. During the 1990s, the combined production for export and the local market averaged 456 tonnes (14.7 million oz) of fine gold annually. GFMS data shows that output hit a peak of 535 tonnes (17.2 million oz) in 1998 but has since declined, reaching a level of 478 tonnes (15.4 million oz) in 2000, due to growing competition in export markets and weaker local consumption (though the latter now appears to have stabilized). Approximately 200 million items are manufactured by Italian jewellery producers each year.

• Arezzo, Vicenza, Bassano del Grappa (specializing in high tech chain products) and Valenza (specializing in fine jewellery with stones) are the leading manufacturing centers.

• Of the 10,000 gold and silver production units employing in the region of 50,000 people, around 95% are family-run goldsmith workshops with just a handful of workers. Production is highly polarized with 2% of the manufacturers accounting for roughly 45% of production. A large part of the jewellery is channeled to home and export markets through 500 wholesalers, located mainly in Milan, Rome and Naples.
• Chain products are a major specialty of Italian production and account for more than one-third of total output. There are several highly mechanized manufacturers who use more than 15 tonnes of gold per year, located chiefly in the Bassano del Grappa area.

• Italy is the world’s largest gold jewellery exporter, exporting in 2001 more than 80% of its production to virtually all countries of the world. By country, the US is the leading destination followed by the United Kingdom, Spain, France and Germany. Also important are the entrepôt markets of Switzerland, Hong Kong, Panama and, above all, the UAE. A large share of the internal European trade nowadays is carried out on a “hand-carried” basis.
• Italy produces all cartages according to the requirements of the country of destination. Overall, a little under 60% of production is in 18 carat gold, with close to 25% in 14 carat.
• The leasing of gold by manufacturers from bullion banks is widespread and allows the industry to cover risk and finance working stock at advantageous rates. Gold can also be supplied to the Italian manufacturer by a local bank on working account (conto lavorazione) on behalf of a foreign wholesaler.
• Italy’s home market, which is exclusively 18 carat, absorbed 92 tonnes (3.0 million oz) of fine gold in jewellery in 2001. It still has the highest per capita consumption in the industrialized world despite a close to 45% fall since 1992, when according to GFMS, demand peaked at 167 tonnes (5.4 million oz). The collapse in local demand was initially linked to economic and political developments affecting Italian society but has latterly been driven more by changing consumer tastes and spending patterns.
• Gold jewellery is sold by 25,000 nationwide outlets. The value of retail sales is roughly €6 bn.

Japan – Jewellery Briefing

According to GFMS, Japan’s gold jewellery production rose marginally in 2001, to just above 37 tonnes (1.18 million oz). This amounted to just over one third of the volumes registered at the beginning of the decade. Japan’s economic vicissitudes and the popularity of platinum are both to blame for the decline.

• The jewellery industry is highly fragmented, consisting mostly of medium-to-small family-run businesses and just a handful of clear market leaders, including some large http://info.goldavenue.com/Info_site/in_glos/in_glos_chain.htmchain makers. Eighteen carat, high quality jewellery is very much the norm. Production is largely for the home market and exports have remained relatively small. Japanese manufacturers are increasing output of lower-end items to boost sales by targeting the mass market.

• The home market is now just over 50 tonnes (1.61 million oz) compared to 120 tonnes (3.86 million oz) in 1990. The jewellery is sold through around 15,000 retail outlets of which only a small proportion are really active and innovative and include the big branded stores and the department stores.
• Traditionally, most of the jewellery was from home fabrication but with the strengthening of the yen, imports increased sharply reaching over 20% of sales in 1994. Today, about 30% of the jewellery comes from abroad, mainly from Italy, France, US and Hong Kong. There is a 6% import duty.

Saudi Arabia – Jewellery Briefing

Saudi Arabia is the largest jewellery manufacturer in the Middle East using annually about 140 tonnes (4.5 million oz) of gold, much of it from recycled gold, as ornaments are regularly traded in for new items. Manufacturing was originally fragmented but has now consolidated around 10 to 15 larger companies situated mostly in and around Jeddah, Riyadh and Damman, which these days focus on better design and quality. Production is mainly in 21 carat, with some 18 carat which is often studded with cubic zirconia.

Some of the larger manufacturers have stepped up efforts to export, mainly to other Gulf countries, but volumes are still small and account for less than 10% of overall production.

The local market now takes about 150 tonnes (4.8 m oz). The bulk is still in 21 carat investment jewellery although increasing volumes of international styles are available. Imported jewellery accounts for around 15% of the market comprising 21 carat items from Malaysia, Singapore and Bahrain and 18 carat from Italy. These arrive mainly via Dubai. Imported jewellery is subject to a 12% customs duty.

• http://www.gfms.co.uk

• Home market demand is very much influenced not only by the gold price but also by the oil price which impacts directly on the prosperity of the Saudi people. Main buying seasons are at the time of Ramadan and the Haj, when pilgrims visit the Kingdom bound for the holy cities of Mecca and Medinah.
• There are 3,000-4,000 retail shops in Saudi Arabia selling mainly plain gold, traditional, investment jewellery with low margins. However, in the shopping malls located in the major cities one can see increasing displays of western-style jewellery, with and without stones.

South Africa – Jewellery Briefing

South Africa supplies approximately 16% of the raw materials for jewellery the world over, while only contributing less than 1% to the world’s jewellery market.

However, South Africa has a well-established jewellery manufacturing industry within which a wide variety of precious metal jewellery items are produced. In recent years, great effort has been put into the development of both jewellery training of and manufacturing by young African designers, with considerable input from major players such as De Beers and AngloGold, supported by the South African Jewellery Council.

The industry is primarily based in the Gauteng and Western Cape regions, with some manufacturing existing in the Durban/Pietermaritzburg and Bloemfontein areas. The industry employs approximately 4,000 people and comprises some 350 manufacturing concerns, ranging from large manufacturers employing in excess of 200 employees to smaller studios, specializing in high value added “designer” pieces.

The local market consumes over half of the jewellery produced domestically but, in recent years, exports have accounted for an increasing share of local jewellery off take. This has been achieved through a series of joint ventures, often involving well established European companies. The majority of these exports have been destined for the United States. This trend is partly related to the fact that South African jewellery exports to the United States attract Generalized System of Preference (GSP) status and so no duty is currently paid on jewellery shipments to the US.

The retail jewellery sector

While South Africa has a large 9 carat gold consumer market, there is also a very strong market for top end, hand crafted pieces made from both 18 carat yellow and white gold as well as platinum jewellery. There are some 3,000 retail jewellery stores in South Africa.

Import Duties

South Africa is a signatory to the General Agreement on Tariffs and Trade and has agreed to abide to the principles contained in the said agreement. At the present time, the following import duties are applicable to diamonds, jewellery and related product:

Spain – Jewellery Briefing

Spain ranks fourth in Europe, after Italy, the United Kingdom and Switzerland in volume of gold jewellery and watches processed using 36.1 tonnes (1.16 million oz) of fine gold in 2001 to produce approximately 15 million items.

• The main regions of production are Cordoba (mainly small workshops producing low-end, small jewellery items), Valencia (industrial medium-range jewellery, with a large proportion stone-set), Madrid (largely medium to high range jewellery and gold watches) and Barcelona (mainly high-end, stone-set jewellery).
• There are approximately 4,000 production units but the vast majority are workshops employing less than five workers. Less than 10% of the units employ more than ten people.
• About 20% of gold jewellery production is exported, main markets being the US and other EU countries headed by France.
• All precious metal jewellery articles sold in Spain must be hallmarked with the official 18 carat mark at one of the 11 regional hallmarking offices or in-house at one of the authorised manufacturers.
• The accepted title within Spain is 18 carat.
• According to GFMS, the Spanish home market is the third largest in Europe, local consumption in 2001 accounting for 53 tonnes (1.6 million oz) fine gold.

• Gold jewellery is sold through 12,000 outlets on the domestic market with a global turnover of more than $2.5m. Consumer tastes vary considerably from North to South; in the former lighter-weight and gem-set articles have made some inroads whereas the latter still tends to favor heavier, traditional plain-gold styles.

• Nearly half of the gold jewellery sold in Spain is made up of imports with Italy supplying the lion’s share. Thailand and France supply small quantities.

Switzerland – Jewellery & Watches Briefing

The Swiss watch industry has been using gold for more than two centuries with manufacture situated in and around three main centres, La Chaux-de-Fonds, Bienne and Geneva.

• Today, Switzerland is the world’s major manufacturer of gold watches. The level of production is strongly influenced by the industry’s pronounced inventory-cycle. This has resulted in annual output ranging from less than 400,000 to more than 650,000 units in the past decade. Over 575,000 units were manufactured and hallmarked in 2001, requiring close to 35 tonnes of gold (1.1 million oz).
• All Swiss precious metal watch cases must be hallmarked by the Contrôle des Métaux Précieux.

• The vast majority is made in 18 carat gold.
• More than half of the cases are fitted with a gold bracelet. The hallmarking of bracelets is not obligatory.
• 80% of the gold cases used in the manufacture of watches are made in Switzerland with the remaining 20% imported mainly from neighboring Italy where they are commissioned by the Swiss watch companies. Some bracelets are also imported from Italy.
• Major gold watchmakers include Rolex, Cartier and Piaget (the latter both part of the Richemont Group).
• More than 90% of the gold watches made in Switzerland are destined for worldwide export. Although in terms of units they accounted for only 5% of overall Swiss watch exports in 2001, watches made of precious metals (which are mostly gold) represented no less than 48% of all Swiss watch exports by value that year. Deliveries abroad of gold watches rose by 15% in value terms in 2001, with major destinations being the US, Italy, Japan, and Hong Kong. US demand fell at a double-digit rate in 2001. Exports to Asia increased, including to Japan and Hong Kong. It was also a positive story across much of Europe, with growth in shipments to most countries, particularly, and for the second year in succession, the UK. The major exception to the good performance in European markets was Italy. Exports to the Middle East were also higher in 2001, in contrast to the weakness of general carat jewellery demand across the region.

• Counterfeit wristwatches made predominantly in S.E. Asia and southern Europe are estimated to account for about 10% of global value.

Thailand – Jewellery Briefing

Thailand is a leading producer and exporter of gems and jewellery combining fine craftsmanship and new technology. Thai gold jewellery is particularly gem-intensive due to the local availability of different precious as well as fine and ornamental stones.

• Production of jewellery came down drastically as a result of the Asian financial crisis from levels of around 80 tonnes (2.57 million oz) prior to 1997 down to 30 tones (0.99 m oz) in 1998. By 2001, production was back up to 75 tonnes (2.41 m oz). However, the rapid development of China as a manufacturing base has taken some work away from Thailand.
• There are about 300 factories producing gold jewellery (and silver), of which 200 are in Bangkok, predominantly engaged in low cost/high labor intensive output. Thailand boasts a handful of very large jewellery factories. There are approximately 20 big wholesalers in Bangkok supplying jewellery to all parts of the country. Many foreign manufacturers have set up in Thailand thanks to the favorable tax environment and incentives.
• Exports of Thai jewellery account for approximately one third of production and main markets are US, Germany, Japan and UK. All caratage is made for export. For exporters, there is exemption or reduction of import duties and value-added tax on raw materials.
• There have been numerous changes to the import and export tax regime in Thailand over the past few years. Some of the biggest changes occurred in September of 2000. Firstly, the 7% value-added tax on gold products was altered so as to apply only to workmanship, and secondly, the import duty on imported unprocessed gold bars was eliminated.

Turkey – Jewellery Briefing

Turkey is the world’s sixth largest gold jewellery fabricator. According to GFMS, jewellery production in 2001 was nearly 133 tonnes (4.27 million oz).

• The manufacturing industry comprises more than 6,000 workshops and a growing number of big factories equipped with modern technology. The largest firm employs more than 1,000 workers.
• Manufacture is centered in and around Istanbul with the majority of workshops in the area of the covered Bazaar, while some industrial-scale manufacturers have moved out to the west of the city.

• ·  Turkish manufacturers produce the whole range of cartages, from 8 carat for Germany, to 22 carat for their home market.
• ·  Exports have grown strongly since the liberalization of currency and precious metals markets in 1993. They now account for more than 35% of production and go out to more than forty markets. The US is by far the leading recipient country, and accounts for more than a third of exports.
• Consumption on the Turkish home market was 83 tonnes (2.67 million oz) in 2001. The market is broadly characterized by two contrasting features: sales to the local population which traditionally takes 22 carat ‘investment’ jewellery and sales to tourists who take 14 carat. However, for some years now, there has been a marked shift amongst the local population, in particular in the cities, away from 22 carat to more fancy, higher mark-up 14 carat articles. Even in the rural areas, the traditional bastion of the 22 carat investment bangle, the consumer is moving to 18 or even 14 carat.
• There are more than 30,000 retail outlets, a large number of which are seasonal catering to foreign tourists who actually form the customer base for all jewellery shops along the western and southern coastline and for more than 50% of the jewellery shops in Istanbul. Studies show that on average one in four tourists tends to buy jewellery.
• ·  There is no obligatory, official hallmarking system in Turkey. With the exception of the 22 carat gold bangles, jewellery production is self-controlled so that some jewellers mark their products with their individual patent serial number. Some export production is assayed by the State mint or bears the Turkish Standard 7000.

United Arab Emirates (Dubai) – Jewellery Briefing

Dubai has evolved as a significant jewellery manufacturer as well as wholesaling substantial quantities of jewellery from Italy, Malaysia, Indonesia and South Korea. Italy alone exports around 25 tonnes (0.8 million oz) of gold as jewellery to Dubai annually. Saudi Arabian manufacturers have also established outlets in Dubai. Factories in Dubai and the neighboring emirate of Sharjah produce around 49 tonnes (1.6 million oz) of gold jewellery annually.

• The essence of jewellery marketing in Dubai is high volume and low mark-up. With no sales tax, it is one of the cheapest places to buy jewellery. Indeed, Dubai calls itself ‘City of Gold’. The 400 gold shops in its souks and shopping malls have 9.3 tonnes (0.3 m oz) on display in 18, 21, 22 and 24 carat gold, often with jewellery, coins and small bars.
• The amount of gold jewellery consumed locally in the UAE stands at around 41 tonnes (1.3 m oz). Retail sales, however, are far higher because of the very large number of purchases made by tourists. A major surge in consumption occurs every March with the Dubai Shopping Festival which actively promotes gold. During the March 2001 festival, it is estimated that over 9 tonnes (0.3 m oz) of gold jewellery was sold.
• The Dubai Gold & Silver Jewellery Group, an association of local manufacturers, wholesalers and retailers, is active in promotion.

United Kingdom – Jewellery B

In the UK, there are up to 2,000 production units (including individual craftsmen) employing more than 10,000 persons in the manufacture of gold and silver jewellery and silverware. Over three quarters of these units are small, employing less than ten people. Main production centers are Birmingham and London.

• According to GFMS the gold jewellery industry used more than 47 tonnes (1.52 million oz) fine gold in 2001 of which close to half was used for producing 9 carat items, over a third for 22 carat items (notably for the local Asian communities), more than 11% for 18 carat items and just 1% for 14 carat items. In all, more than 17m items of jewellery are produced of which near 90% are in 9 carat which is the mainstream title used on the UK market.
• Jewellery exports are small but growing, accounting for roughly a fifth of production. The main destinations are US, Ireland and France.
• In 2001 the UK home market consumed 82 tonnes (2.64 million oz) of gold jewellery, an increase of more than 9% year-on-year, with official imports from Italy at over 20 tonnes (0.68 million ounces).
• All gold articles sold on the UK market and weighing more than one gram must be hallmarked at one of the four assay offices in London, Birmingham, Sheffield or Edinburgh. There are six legal standards of purity: 375, 585, 750, 916, 990 and 999.
• More than half (in tonnage terms) of UK domestic jewellery consumption is accounted for by imported items, with main volumes coming from Italy, India and the United States.

• Jewellery is sold through 6,000 retail outlets of which a relatively high proportion, compared to other European countries, is accounted for by multiples.

United States – Jewellery Briefing

According to figures published by GFMS, the United States in 2001 ranked fourth in the world, after India, Italy and China in gold jewellery fabrication, using 158 tonnes (5.1 million oz) of fine gold. Production had grown by 50% since the recession-induced low point recorded in 1991. In 2001, however, the industry suffered a major setback. Production slumped due to a high level of trade stocks being carried over from the previous year. This owed much to, and was exacerbated by, a recession-induced weaker trend in US jewellery consumption that had set in from the fourth quarter of 2000 onwards. Finally, and especially with the strong dollar over much of 2001, competition from imports was ferocious. As regards the last of these challenges, up until 2000 US manufacturers’ loss of market share to imports had partly been cushioned by not only rapid growth in US jewellery consumption but also due to American companies relocating part of their production abroad. In 2001, however, both imports and domestically produced articles registered sales declines at the trade level. The picture was a little brighter at the retail level due to a major rundown of inventories.

• The manufacturing industry was originally centered in New England, in Massachusetts and Rhode Island, but has since diversified to other parts of the country, such as Florida and, especially, Los Angeles. The industry numbers approximately 4,000 production units of which 80% have less than 25 employees. Consolidation within the industry brought the number of manufacturers down by 20% during the 1990s. It is common for US manufacturers to focus on specific production lines.

• The bulk of production is in 14 carat with growing volumes of both 10 carat and 18 carat jewellery. Exports account for up to a quarter of production; major destinations are Mexico, Canada, Hong Kong and the UK.
• The US home market at the trade level absorbed 381 tonnes (12.2 million oz) of jewellery in 2001. This represented a 7% decline from the previous year’s record high. As explained above, this setback came after a decade of uninterrupted growth – consumption in 1991 according to GFMS was by comparison only 238 tonnes (7.7 million oz). Over the period, the share of the domestic market taken by imported jewellery has grown from just over half to more than two-thirds. The main supplier countries are Italy, India, Turkey, China and Thailand. Recent growth from East Asia has been notable, especially from mainland China and Hong Kong. Both India and Turkey have until recently enjoyed duty exemption thanks to the Generalized System of Preferences while Italy has been subject to the handicap of a 6.2% import duty.

• According to GFMS the value of plain gold jewellery retail sales was over $16 billion in 2001 in an overall jewellery market of more than $40 billion. Even though 2001 was a difficult year, over the past decade the size of the US jewellery market has risen by close to two-thirds. This growth has been attributable not only to an increase in consumers’ purchasing power but also to highly efficient discount jewellery chains and non-store retail outlets. From a low base, on-line jewellery sales are rising sharply and are predicted to exceed one billion dollars by the year 2003.
• Although 14 carat remains the norm in the US market, 18 carat jewellery has gained some ground as American consumers become more international and sophisticated in their tastes for fine jewellery. Ten carat has also been rising as it provides lower price points in the market for heavier articles.